Two Denver energy companies say they're merging to create a new company that will focus on drilling in northeast Colorado.

Bill Barrett Corp. (NYSE: BBG) and Fifth Creek Energy say they're merging in a deal worth $649 million. The new holding company will be called the "new BBG" and will focus its efforts in rural areas in the Denver-Julesburg Basin around Weld County.

Bill Barrett CEO Scot Woodall will remain CEO of the merged company.

"We have been seeking opportunities to expand our core DJ Basin asset base with the right acquisition to ensure the best value creation opportunity for our stockholders," Woodall said in a Dec. 5 statement.

As part of the deal, Bill Barrett's stockholders will exchange their Bill Barrett common stock for New BBG common stock on a 1-for-1 basis, and Fifth Creek's current sole owner will receive 100 million shares of the New BBG's common stock.

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